Spring planting across most of America is nearing completion, but there is a dramatic difference in this fifth year of a credit and price crisis that has driven thousands of farmers out of business since 1982.
The hope that traditionally inspires farmers has waned. The faith that a beneficent Washington would step in to save the day is diminished. The belief that America's agricultural abundance would be required to feed the world is shaken by lost markets and new competition abroad.
Pessimism runs so deep in Texas that more than 15 percent of the farmers have told the state agriculture department they expect this to be their last year in farming. In Missouri and in Kansas, where about one in eight farmers holds virtually unrepayable debts, about 6 percent have said this will be their last year.
Similar figures are reported from other major agricultural states, where farmers carried on this year only because of bumper crops last fall and large government subsidy payments.
Agricultural economists calculate that at least 100,000 farmers -- roughly 5 percent of the nation's 2.2 million -- reached the end of the road this spring, unable to finance their 1986 crop planting. Many are clients of the Farmers Home Administration (FmHA), the "last resort" for borrowers denied credit elsewhere, which invoked stringent new rules this year aimed at cutting off the most heavily indebted farmers.
"The far end has got to drop off . . . . We're going to lose a lot of farmers this year, and we've got to accept that," FmHA Administrator Vance L. Clark recently told reporters.
Some hang on by their fingernails. Unable to secure bank or government credit, their planting is financed by their federal crop subsidy payments, with help from neighbors and relatives or other cost-sharing arrangements. Government figures indicate that at least 200,000 farmers -- perhaps 12 percent of the total -- are close to insolvency.
"The unavailability of credit is not significantly different this year," said Robert Jolly, an agricultural economist at Iowa State University. "But farmers are tenacious people. In Iowa, we've chewed on this for four or five years, with more cost controls, liquidation of assets and other steps. This whole process of farmer elimination is relatively slow."
Overwhelmed with debt and unable to catch up as farm prices and land values slide, the 100,000 failed farmers join a like number from 1985 in the vanguard of a "transition," as the experts call it, that is reshaping American agriculture and changing the face of Main Street USA.
The pessimism, and the impact, spreads into the communities that rely on agriculture to support businesses and public services.
"Rural America is just shot," said H.A. (Hap) Arnold, a banker and implement dealer in Charleston, Miss. "We haven't enjoyed the prosperity at all. The thing that scares me is the [price] projections into the 1990s . . . . We fear 20 percent of our businesses will be gone when the pinch hits us next year."
A study released two weeks ago by the Senate intergovernmental relations subcommittee warns that a rapidly declining property-tax base, caused by falling land values, and an increase in property-tax delinquencies threaten the quality of life in many rural areas. "If these trends continue, rural local governments cannot avoid both cutting services and increasing taxes," the study says.
In 1982, Arnold had 400 regular customers at his John Deere dealership. He has 200 today and estimates that he will have 100 in a couple of years. "Everything I've made in the last 30 years has gone back into this business during the last three years," Arnold said. "More bankruptcies affected us in January and February than we made in the first 15 years in this business."
Agricultural economists cite another important result of the farm crisis -- new class differences.
"We are still facing five years of declining farm prices and more decline in land values," said Paul Gessaman, an agricultural economist at the University of Nebraska. "I have tried to emphasize that we really are dividing people in agriculture into 'haves' and 'have-nots.' The divider usually is a level of debt, although sometimes it is a farmer's level of efficiency."
University of Minnesota economist emeritus Phil Raup added: "We've never had as wide a spread between the top 20 percent and the lower 20 percent of our farmers. That is why people are so worried. The spread is greater, the accident of birth is more important. It seems to say if they were not born with a silver spoon, or pitchfork, in their mouth, they cannot own land."
Economists and farm-debt analysts see trends toward larger and smaller farming operations, with fewer of the so-called "family farms" that are generally medium-sized; toward more farmers who lease the land they work; and toward fewer services and small businesses in the towns that thrive on strong, diversified farms.
Several factors contribute to these trends:
*Tighter lending policies by the FmHA, country banks and the Farm Credit System, which holds about one-third of the nation's $212 billion farm debt, are forcing more debt-ridden farmers to scale back operations or quit farming altogether.
*A new federal farm program designed to make exports competitive by lowering prices is hastening the exodus of marginal farmers. But heavy enrollment in most programs this year, assuring cash subsidies, will help carry many farmers through 1986.
*Aside from that program, the spigot of aid from Washington appears to be tightly shut. Bowing to Reagan administration objections, Congress has refused to increase spending for FmHA farm loans from their present level, which is substantially below last year's level. Apathy, veto threats or both have kept Congress from passing additional debt-relief legislation.
*With prospects dim for higher prices and big new markets, a massive decapitalization of agricultural assets -- the downside of the great inflationary run of the 1970s -- continues. The inevitable result is large write-offs of debts by the government and banks, more trouble for strapped rural banks, further erosion of farmers' net worth, more bankruptcies and foreclosures.
In the early phase of the farm economic crunch, equity declines caused mostly paper losses of inflation-fired gains from the 1970s. But these cumulative equity losses have put many otherwise solid farmers into a severe bind, because their outstanding debt nears or passes the collateral value of their property. Farmers become insolvent; lenders take big losses.
Neither Congress nor the administration has signaled how they will deal with unpayable farm debts. Various proposals for debt write-offs and assistance to lenders are floating around Capitol Hill, but none has prevailed.
"There's just no way a lot of this debt is going to get repaid," said Rep. Berkley W. Bedell (D-Iowa). "Someone is going to have to eat it, and the question is whether it will be done in a way that the system can digest or whether it will wreck the whole thing. My feeling is that it is going to take more of a problem before there is action by Congress."
Bruce Johnson, an economist at the University of Nebraska, said, "The 'fun game' of acquiring land in the 1970s was an aberration, and it has been washed out. But there is a question if we have learned the lessons of that experience."
Land values in some midwestern states have fallen more than 50 percent since the 1981 peak, with few experts willing to say the market has hit bottom. Iowa leads in the five-year land value decline with 58 percent. Minnesota, down 52 percent since 1981, led the nation last year with a 26 percent drop.
As potential land buyers wait for the bottom, the inventory of unsalable property grows. The FmHA holds more than 1 million acres of repossessed land and nearly that much reportedly is held by insurance companies. The Farm Credit System holds land and buildings worth an estimated $983 million -- almost double the amount of a year earlier -- and the system continues to show huge loan losses despite a federal bailout program approved in 1985.
Most of the unsalable land is being farmed by renters, sometimes by the same farmers who lost the property in foreclosure or liquidation. In other cases, the FmHA is returning marginally productive repossessed land back to soil-conserving pasture and grass to prevent more production of surplus commodities.
In such a financial environment, even successful farmers such as Robert Carson of Marks, Miss., are uncertain about the future.
"The next couple of years are going to be tough to hold on, but then you'll see better prices help those who survive," said Carson, who has grown cotton for 35 years in the fertile Delta. "If we can get out of this in two years, we can survive. But you'll see bigger and bigger farms. I don't think there's any turnaround from that.
"It is a crying shame that we can't grow airplanes, guns or missiles. We'd be in good shape if we could."